The_Open_Door_deel1

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The Liberian Government owns 50? of the shares in LAMCO
(1,000,000 shares of Class A Stock of the par value of $ 1.00
each) for which no cash payment was made. Although the 1960
concession agreement does not give an explanation this was
supposedly agreed upon in consideration of the Government's
ownership of the soil and the granting of the concession. This
50? interest entitles the Government to name five members of
LAMCO's Board of Directors, the other six being appointed by the
owner of the other 50? of the company's shares (1,000,000 shares
of Class B Stock of the par value of $ 1.00 each), the Liberian
Iron Ore Ltd,
The discrimination in rights with respect to the appointment of
the Company's Directors was to be the only legal difference in the
rights of the owners of Class A Shares and of Class B Shares,
Each of the shareholders is entitled to 50? of the annual net
profits of LAMCO and the Government agreed to forfeit all and any
existing or future taxes, fees, or charges which the Company, its
managers, money-lenders or contractors, would normally be liable
to pay (including customs duties, royalties, corporate income
taxes, withholding taxes, etc.), in consideration of this profitsharing
arrangement (19)•
Section 11 of the 1960 Concession Agreement deals with the
calculation of LAMCO's annual net profits and obliges the Company
consistently to apply the depreciation methods chosen. But the
most important part of this Section allows for the following
deductions from the Company's annual gross business income in
order to arrive at its net income, which is available for
distribution to the shareholders:
I cost of production of ore sold (including an
allowance for depreciation of facilities);
II all operating and management expenses;
III previous losses incurred ("loss carry forward
privilege");
IV charges for reserve funds for capital
expenditures, for working capital, for
maintenance, for depreciation and amortization
of indebtness incurred prior to production;
V annual interest charges and sinking funds
payments on any borrowed capital and any other
repayments of the principal amounts of the
loans (provided the loans' terms are reasonable
and without duplicating one of the foregoing
items );
VI any specific losses sustained; and
VII donations or contributions made by the Company
to the Republic of Liberia or to any charity,
religious, or educational organization and
approved by the Secretary of the Treasury.
It was further agreed that generally accepted accounting
principles would be employed in determining the Company's annual